How Will California Sweepstakes, DFS Fights Affect Sports Betting

The battle over gambling in the Golden State is heating up as summer comes to an end.

The California Senate passed AB 831, which proposes a ban on sweepstakes casinos and sportsbooks, by a unanimous vote. The bill will now head back to the Assembly, which will vote on some of the changes made by the state’s other legislative chamber. If passed, the ban would not affect the state lottery or limited sweepstakes promotions.

When the bill was initially introduced, it was seen as a way for state lawmakers to continue to repair relations with the tribal gaming industry. However, four tribes have allied with the sweeps industry, along with some prominent cardroom operators. Several tribal leaders have accused operators of trying to drive division between different tribes by making inflated promises.

While lawmakers consider AB 831, California Attorney General Rob Bonta is waging a battle with the daily fantasy sports industry. He recently published an opinion that DFS games violated state gambling laws, and promised to force operators to exit the market. Governor Gavin Newsom has publicly shared his opposition to Bonta’s opinion, but isn’t planning to fight him on it.

How Do These Fights Affect Sports Betting?

The most significant story to watch among the crowded California headlines involves the infighting between the state’s tribes. While just four of the over 100+ tribes broke ranks, the tribal gaming industry will have an incentive to negotiate.

In addition to aligning with sweeps operators, the four rogue tribes have also allied with cardroom operators. The tribal gaming industry has become bitter enemies of many cardroom operators over previous attempts to legalize sports betting. They have accused cardrooms of using dishonest tactics to ensure they were granted rights to licenses for the industry.

The tribal gaming industry’s success in fighting sports betting is primarily due to public messaging, which has led to pressure on lawmakers. However, if more tribes align with the cardrooms, it would negate that advantage. 

That would create an opportunity for state lawmakers to negotiate a gaming compact with the new alliance, effectively excluding the tribal gaming industry. It would also allow for legalization to happen far faster, which could lead sportsbooks to back the new coalition.

While this scenario is far off from becoming a reality, the potential threat could lead larger tribes to negotiate. One way to do that would be to actively work to legalize sports betting and offer the smaller tribes a share of the profits.